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Island mayors decry VAT reduction link to refugee numbers

The discount in value-added tax (VAT) on five eastern Aegean islands must not be linked to the number of refugees and migrants they host, their mayors said in a joint statement on Thursday.

The VAT discount on Lesvos, Chios, Samos, Leros and Kos, which have all borne the brunt of the refugee crisis since 2015, was extended for another six months, according to a legislative act published on Monday in the Government Gazette and a ministerial decision signed by Finance Minister Euclid Tsakalotos on the same day. The decision means that these islands will continue to enjoy a 30 percent discount on all VAT rates.

However, the mayors and local officials denounced as “unacceptable and immoral” the government’s decision to link the lower VAT rate to refugee numbers on the islands. “What are we to do if the numbers don’t add up? Borrow refugees from other islands?” one local authority official said on Thursday.

Moreover, the mayors said on Thursday that linking the VAT rate to the number of refugees will reflect negatively on the islands’ image.

The mayors insisted that lower VAT on the islands is supported by a 2006 European Union directive that allows member-states to implement different rates based on geographic criteria.

“The overwhelming majority of these geographic criteria concern island areas,” the statement said, citing the example of the Faroe Islands and Greenland of Denmark, Heligoland of Germany, Spain’s Canary Islands, Portugal’s Azores and Madeira, and the UK’s Isle of Man.